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UK 4G spectrum auction aims for mid-2011

The government will make an announcement about the future of mobile broadband services in the UK by the end of July, the Department for Business, Innovation and Skills has said
Written by David Meyer, Contributor

The spectrum needed for 4G mobile broadband services in the UK is likely to go up for auction in a year's time, the government has said.

Auctioning spectrum in the 800MHz and 2.6GHz bands would allow mobile operators to roll out much faster mobile broadband services than the 3G services currently available, with speeds going up to 100Mbps or roughy double that of HSPA+, the most advanced version of 3G. The 4G spectrum auction was originally scheduled for 2008.

In an answer given last Thursday to a parliamentary question, under-secretary of state Ed Vaizey — who works across the Department for Business, Innovation and Skills (BIS) and the Department for Culture, Media and Sport (DCMS) — said the government hoped to make an announcement about the future of mobile broadband internet by the end of the summer recess. This was apparently a mistake.

A BIS spokesperson told ZDNet UK on Monday that Vaizey had meant to refer to the start of the summer recess — which begins on 29 July — rather than the end, adding that the announcement would be that of the laying down of a statutory instrument (SI) "setting out the decision on the future of spectrum modernisation". The actual auction will probably take place "around a year from now", the spokesperson said.

According to industry sources, Vaizey is unlikely to lay down a new SI, but will rather pick up an existing SI that was laid down by the Labour government before the May general election. That piece of secondary legislation would make it possible for operators that hold 2G/GSM spectrum in the 900MHz and 1800MHz bands to 'refarm' that spectrum for 3G services — currently only allowed in the 2.1GHz band.

The spectrum that will go up for auction is a 72MHz wide slice in the 800MHz band — currently used for analogue services, but due to be freed up in the digital TV switchover — and a 190MHz wide slice in 2.6GHz band. Services that could be run in these bands include the long-term evolution (LTE) of 3G and WiMax, although the former technology has gained much more operator backing in Europe than the latter.

Operators such as O2 and T-Mobile have argued that they cannot value the 800MHz and 2.6GHz spectrum for bidding until they know whether they can refarm their 2G spectrum for 3G services. Different operators hold differing amounts of 900MHz and 1800MHz spectrum, making it trickier for Ofcom and the government to establish a fair system for spectrum refarming that will not overly benefit one operator over another.

Legal threats from these operators have held up the auction process since 2008, when the auctions were originally supposed to take place. O2 told ZDNet UK on Tuesday that "decisions on spectrum by government and the regulator in the coming weeks will have implications for the long-term dynamics of our industry".

"It's crucial we reach an outcome that promotes both competition and innovation," O2 said. An Ofcom spokesperson told ZDNet UK on Monday that the telecoms regulator was just "very keen to get the auction process rolling".

Although the UK government raised £24.6bn at auction for 3G licences a decade ago, a figure seen at the time as exceptionally high, it seems likely that the 4G spectrum auction will raise far less money. The German government auctioned off its 4G spectrum in May for just €4.38bn (£3.73bn), just over half of some analyst predictions.

Meanwhile, Kip Meek, the independent spectrum broker who drew up the spectrum refarming plans, is to become the chairman of Project Canvas, according to a report in Tuesday's Guardian. Project Canvas is a consortium dedicated to creating a cross-channel video-on-demand service for Freeview and Freesat, with participants including the BBC, Channel 4, ITV, BT, TalkTalk and Arqiva. According to Tuesday's report, the appointment of Meek — who predicted a 2011 spectrum auction last January — will be announced later this week.

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